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CenterPoint Energy Reports First Quarter 2009 Earnings

Houston, TX – April 29, 2009 - CenterPoint Energy, Inc. (NYSE: CNP) today reported net income of $67 million, or $0.19 per diluted share, for the first quarter of 2009 compared to $122 million, or $0.36 per diluted share, for the same period of 2008.  Operating income for the first quarter of 2009 was $285 million compared to $336 million for the same period of 2008.
 
“A number of charges recorded this quarter masked what would have otherwise been good operating performance by our businesses given the current economic conditions,” said David M. McClanahan, president and chief executive officer of CenterPoint Energy.  “We expect that these charges will effectively turn around as the year progresses.  While reduced deliveries at our electric utility also had a negative impact on our first quarter earnings, our gas utilities, interstate pipelines, field services and competitive gas sales and services units turned in solid performances.  We continue to believe that the overall fundamentals of our balanced portfolio of electric and natural gas businesses remain strong and position us well for the future.” 

OPERATING INCOME BY SEGMENT

Electric Transmission & Distribution

The electric transmission & distribution segment reported operating income of $70 million for the first quarter of 2009, consisting of $37 million from the regulated electric transmission & distribution utility operations (TDU) and $33 million related to transition bonds.  Operating income for the first quarter of 2008 was $91 million, consisting of $54 million from the TDU, $32 million related to transition bonds, and $5 million from the competition transition charge (CTC).  The CTC was discontinued in February 2008 when the company monetized the remaining true-up balance.  Operating income for the TDU benefited from growth of nearly 35,000 metered customers since March 2008 and higher net transmission revenues, which were more than offset by reduced usage due to milder winter weather and customer conservation.

Natural Gas Distribution

The natural gas distribution segment reported operating income of $118 million for the first quarter of 2009 compared to $121 million for the same period of 2008.  Operating income benefited from rate increases and higher miscellaneous revenues, offset by higher pension expense and reduced sales as a result of the economic downturn and customer conservation.

Interstate Pipelines

The interstate pipelines segment reported operating income of $69 million for the first quarter of 2009 compared to $71 million for the same period of 2008.  Higher revenue from the Carthage to Perryville pipeline was offset by higher operation and maintenance expenses in part related to increased pension expense. 

In addition to operating income, this business had an equity loss of $2 million for the first quarter of 2009 from its 50 percent interest in the Southeast Supply Header (SESH), a new pipeline that went into service in September 2008.  The company recorded a non-cash charge of $5 million during the quarter to reflect SESH’s decision to discontinue the use of Statement of Financial Accounting Standards No.71 – Accounting for the Effects of Certain Types of Regulation.  The loss more than offset the equity income of $3 million from SESH’s operations.  In the first quarter of 2008, equity income was $5 million from pre-operating allowance for funds used during construction. 

Field Services
 
The field services segment reported operating income of $26 million for the first quarter of 2009 compared to $45 million for the same period of 2008.  Operating income for the first quarter of 2008 included gains of $17 million associated with the settlement of a contractual dispute and the sale of non-strategic assets.  Excluding these prior year gains, operating income for the first quarter of 2009 declined slightly.

In addition to operating income, this business had equity income of $2 million in the first quarter of 2009 compared to $4 million in the first quarter of 2008 from its 50 percent interest in a gas processing plant.  The decline was due primarily to lower natural gas liquids prices.

Competitive Natural Gas Sales and Services

The competitive natural gas sales and services segment reported operating income of $2 million for the first quarter of 2009 compared to $6 million for the same period of 2008.  The decline in operating income was due primarily to an inventory write-down to the lower of average cost or market in the first quarter of 2009.  In addition, operating income for the first quarter of 2009 included charges of $19 million resulting from mark-to-market accounting for derivatives used to lock in economic margins of certain forward natural gas sales compared to charges of $22 million for the same period of 2008.

DIVIDEND DECLARATION

On April 23, 2009, CenterPoint Energy’s board of directors declared a regular quarterly cash dividend of $0.19 per share of common stock payable on June 10, 2009, to shareholders of record as of the close of business on May 15, 2009.    

OUTLOOK REAFFIRMED FOR 2009

CenterPoint Energy reaffirmed its 2009 earnings guidance of $1.05 to $1.15 per diluted share.   This guidance takes into consideration various economic and operational assumptions related to the business segments in which the company operates.  The company has made certain assumptions regarding the timing and cost of certain financing activities and the impact to earnings of various regulatory proceedings, including recovery of costs associated with Hurricane Ike.  The company cannot predict the ultimate outcome of any of those proceedings.  In providing this guidance, the company has not projected the impact of any changes in accounting standards, any impact from acquisitions or divestitures, the timing effects of mark-to-market or inventory accounting in our competitive natural gas sales and services business, or the outcome of the TDU’s true-up appeal.  The company has also excluded any impact to income from the change in value of Time Warner stocks and the related ZENS securities.

FILING OF FORM 10-Q FOR CENTERPOINT ENERGY, INC.

Today, CenterPoint Energy, Inc. filed with the Securities and Exchange Commission (SEC) its Quarterly Report on Form 10-Q for the period ended March 31, 2009.  A copy of that report is available on the company’s Web site, www.CenterPointEnergy.com, under the Investors section.  Other filings the company makes at the SEC and other documents relating to its corporate governance can also be found on that site.

WEBCAST OF EARNINGS CONFERENCE CALL

CenterPoint Energy’s management will host an earnings conference call on Wednesday, April 29, 2009, at 10:30 a.m. Central time or 11:30 a.m. Eastern time.  Interested parties may listen to a live audio broadcast of the conference call at www.CenterPointEnergy.com.  A replay of the call can be accessed approximately two hours after the completion of the call and will be archived on the Web site for at least one year.

CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines, and field services operations.  The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total nearly $19 billion.  With about 8,800 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years.  For more information, visit the Web site at www.CenterPointEnergy.com.

This news release includes forward-looking statements.  Actual events and results may differ materially from those projected.   The statements in this news release regarding future financial performance and results of operations and other statements that are not historical facts are forward-looking statements.  Factors that could affect actual results include the timing and outcome of appeals from the true-up proceedings, the timing and impact of future regulatory, legislative, and IRS decisions, effects of competition, weather variations, changes in CenterPoint Energy’s or its subsidiaries’ business plans, financial market conditions, the timing and extent of changes in commodity prices, particularly natural gas, the impact of unplanned facility outages, and other factors discussed in CenterPoint Energy’s and its subsidiaries’ Form 10-Ks for the fiscal year ended December 31, 2008, CenterPoint Energy’s Form 10-Q for the period ended March 31, 2009, and other filings with the SEC.